Soweto beats suburbia at its own game

House prices keep rising in Soweto, an indication of a growing middle class in the historically black urban areas of South Africa. (Oupa Nkosi, M&G)

House prices keep rising in Soweto, an indication of a growing middle class in the historically black urban areas of South Africa. (Oupa Nkosi, M&G)

At 5pm the cars that slowly make their way back into Soweto range widely from beat-up old taxis to new Kia Picantos and a handful of Mercedes-Benz C-Class cars. Billboards advertise whisky and vodka, and large KFC and Steers signs pierce the skyline.

Soweto, the most populous of the historically black urban residential areas in South Africa and an iconic site, rich in political history, appears to be a town steeped in consumer culture. Malls have sprung up in every suburb and housing prices have boomed over the years.

The Roots 2013 survey, recently released by the Newspaper Advertising Bureau, is the largest survey to look at communities in terms of the urban landscape in South Africa and has gathered consumer information from 115 of these communities.

Soweto is home to more than 40% of Johannesburg's residents and the 10 Soweto suburbs surveyed paint a fairly congruous picture.
Most respondents frequent shopping malls, own cellphones and said they had bought a takeaway meal at least once in the past month.

The data showed that monthly household income in these 10 suburbs ranges from R6 000 in Jabavu to R8 900 in Orlando and is topped only by R11400 in Protea. Between 36% and 61% of the community in the suburbs are employed; and between 21% and 39% own a car.

Property prices in the area are increasing, which is an indication of the growing middle class in Soweto.

Comprehensive data
According to Lightstone, a provider of comprehensive data, analytics and systems on property, automotive and business assets, the number of property transactions in Soweto has fluctuated over recent years, but the transaction value has increased significantly.

For example, in 2002 Lightstone recorded close to 16 000 transactions to the value of R167-million. In 2012, fewer than 4 500 transactions were recorded, but with a transaction value of almost R700-million.

Mike Schüssler of said many older townships could be defined as middle class.

"There are eight million cars in South Africa, but worldwide only one in four adults has a car. So that is middle class in some way."  

He also said South Africans were rich in assets – 70% of households own their homes.

Carl van Aardt from the Bureau of Market Research at Unisa said it was Karl Marx who theorised that one must look for classes that are not artificially split but that are defined by characteristics.

Desires and insecurities
Van Aardt explained that, in South Africa, classes can broadly be defined as: low income, lower-emerging middle class, realised middle class (which would generally earn between R350 000 and R750 000 a year) and the affluent.

 "There are certain parts of Soweto that have many affluent people," Van Aardt said. "But the bulk of Soweto falls in the emerging middle class – the working-class grouping – and some are in the realised middle-class group. The real low-income group is still there but hasn't grown much in recent years."

Schüssler said: "Townships are becoming more like suburbia, and suburbia – with shebeens and taxis moving in – is becoming a little bit more like townships."

Marketing experts agree. John Davenport at advertising agency Ireland/Davenport said the marketing strategy for consumers in townships such as Soweto should be no different to one aimed at residents of traditional suburbs.

"I think people are people when you get down to it. We have the same desires and insecurities, needs and wants. It's vital, especially for brands, to speak to people as a friend – in a peer voice rather than a corporate voice," Davenport said.

"What you find in the townships, it is not a specific group but a microcosm of society in general." And all these different segments must be addressed in a different manner.

These different segments have always been there in areas like Soweto, but there is so much more now since the end of apartheid.

Good and bad
The proliferation of shopping malls in the area has brought both good and bad. Churchill Mrasi, chairperson of Greater Soweto Business Forum, said small businesses had suffered as a result of these developments.

"There's been an influx of shopping malls; they have invaded the townships," Mrasi said. "We were thinking that they would create opportunities. Instead, most of the small businesses have closed down."

In 2011 the Bureau of Market Research released findings that only two out of five informal businesses started in Soweto were still in operation five years later – more than 60% of small businesses closed their doors between 2007 and 2011 and fewer new businesses opened.

Schussler said a balance was needed. "Those who will create more jobs are the smaller guys who get squeezed out of malls because of high rent … But we need economies of scale … bulk buying keeps prices lower."

Lisa Steyn

Lisa Steyn

Lisa Steyn is a business reporter at the Mail & Guardian. She holds a master's degree in journalism and media studies from Wits University. Her areas of interest range from energy and mining to financial services and telecommunication. When she is not poring over annual reports, Lisa can usually be found pottering about the kitchen. Read more from Lisa Steyn

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